• The Wall Street Journal (by subscription), Wednesday, October 11, 2006 11:45 AM

The YouTube acquisition broadens the horizon somewhat for Google in its relationship with sites like News Corp.'s MySpace. In fact, Google CEO Eric Schmidt and vice president of ad sales Tim Armstrong are set to meet with News Corp. executives this week to discuss new ways of working together. Fox Interactive President Ross Levinsohn confirmed the visit, saying: "If we can figure out the ways to work with them or integrate with them, that could be really good for us."

Google only just reached a landmark search agreement with the News Corp. social network. Under that deal, Google will power the search engine's FIM units MySpace, IGN and others, and the companies will share the ad revenue. But Google's purchase of YouTube presents both an opportunity and a potential competitive threat for social-networking juggernaut MySpace. YouTube and MySpace compete directly for users of video content. However, YouTube also gets a substantial share of its audience from MySpace users, who link to YouTube videos on their pages.

News Corp. executives may still be smarting from the way it was stonewalled by YouTube. When the media conglomerate asked, YouTube said it was not for sale. When news of the Google acquisition broke, News Corp. asked for an opportunity to participate in the deal somehow, but YouTube didn't respond. In reaction, executives discussed the possibility of dropping YouTube links from MySpace. Assuming that Google's relations with the social-network's owner are still good, there could be a lot riding on the meeting this week.

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